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TMI Blog2017 (12) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolvency Resolution Process. Section 49 enables the Adjudicating Authority to pass orders to set aside the undervalued transactions as referred to in sub-section (2) of Section 45, and therefore keeping the allegations in the Application and keeping the Report dated 5.9.2017 of Insolvency Resolution Professional in the matter, this Adjudicating Authority is of the considered view that this Application, before this Adjudicating Authority, is maintainable. There is no provision in the IB Code that enables the Creditors other than those who triggered the Insolvency Resolution Process to be impleaded as parties. However, the Operational Creditor can file claims, raise objections before Insolvency Resolution Professional and also invoke the jurisdiction of this Adjudicating Authority. That means, a right of audience is always there to the Applicant in his capacity as Operational Creditor. Similarly, the Insolvency Resolution Professional shall also give notice of all meetings of Committee of Creditors to all the Operational Creditors including the Applicant and consider the objections, if any, raised by the Operational Creditors. In that view of the matter, a formal order of implead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandeep Singh Bhatia, Mrs. Veena Bhatia, Mrs. Gurvinder Kaur Bhatia, Mr. Manjeet Singh Bhatia, Mrs. Indrajit Kaur Bhatia, Ms. Ishipal Kaur Bhatia, Mr. Kulwant Singh Bhatia, GS Bhatia (HUF) who have issued personal guarantees to the Petitioner/Financial Creditor; (e) That this Hon ble Tribunal be pleased to pass an order declaring that the various entities in the Bhatia Group including but not limited to Bhatia Coke and Energy Limited, Bhatia Coal Washeries Limited, Bhatia Industries and Infrastructure Limited, Bhatia Sons (India) Limited, BCC Cargo Limited, BCC Enterprises (India) Limited, BCC Estates (P.) Limited, Reliance Services and Consultants Ltd., Associated Transport Company and Ishaar Overseas Pvt. Ltd are a common economic entity and/or benami entities holding on to the erstwhile assets of the Corporate Debtor and/or fraudulent conduits holding on to the erstwhile assets of the Corporate Debtor and/or transferee pendente lite and/or garnishee holding on to the erstwhile assets of the Corporate Debtor assets of the corporate debtor; (f) That in the alternative to prayer clauses (d) and (e), this Hon ble Tribunal be pleased to clarify the purport of its earlier or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shee proceedings against MMTC Ltd and State Trading Corporation of India Limited before the Delhi High Court being Execution Petition No. 58 of 2015 in order to recover ₹ 80,98,36,185 due and payable from MMTC Ltd. to the Corporate Debtor and ₹ 21,74,85,502 due and payable from State Trading Corporation of India Limited to the Corporate Debtor, garnishee proceedings against Madhya Pradesh Power Generation Company Ltd. before the Court of II Additional District Judge, District Court, Jabalpur (MP), Ex AB/0500273/2015 in order to recover a sum of ₹ 75,50,30,403 due and payable by Madhya Pradesh Power Generation Company Ltd. to the Corporate Debtor and garnishee proceedings against Kerala Sponge Iron Ltd. before the Court of II Additional District Judge, Palakkad Kerala, Execution Petition No. 146 of 2015 to recover 3,46,71,137 due and payable from Kerala Sponge Iron Ltd. to the Corporate Debtor; (i) That this Hon ble Tribunal be pleased to clarify the purport of its earlier order dated 23rd May 2017, does not restrict in any manner whatsoever or prevent the Hon ble Gujarat High Court in Petition under Arbitration Act No. 19 of 2017 from auctioning the cargo of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t rejected the said objections raised by the Corporate Debtor by its Judgment dated 15th September, 2014. Therefore, the foreign Award is deemed to be the decree of the Hon ble Bombay High Court by virtue of the Arbitration and Conciliation Act, 1996. In the Special Leave Petition (Civil) No. 813 of 2015 preferred by the Corporate Debtor against the order of the Hon ble Bombay High Court, before the Hon ble Supreme Court of India, conditional stay was granted. The Corporate Debtor filed Interim Applications No. 1 of 2015 and 2 of 2015 before the Hon ble Supreme Court seeking orders modifying the stay order dated 19th January, 2015 made in SLP No. 813 of 2015. The Hon ble Supreme Court of India vide its order dated 13th February, 2015 rejected the Interim Applications No. 1 of 2015 and 2 of 2015 filed by the Corporate Debtor. Since the Corporate Debtor failed to furnish Bank Guarantee of 50% of the decretal amount there is no stay on the Section 48 Objection Judgment passed by the Hon ble Bombay High Court. 5. Applicant made several allegations in the Application against the officers of Indore Branch of IDBI Bank. It is alleged that the Officers of IDBI Bank and officers of other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir fraudulent conduits to which the erstwhile assets of the Corporate Debtor had been fraudulently hived off and/or dissipated and/or funnelled to. 7. There is also hiving off of the overseas assets of the Corporate Debtor which are narrated hereunder; a. M/s. Fleetmar Shipping Company Limited of Cyprus ( Fleetmar ) which was the registered owner of the vessel MV Harkriipa; b. M/s. Guru Corporation Limited of Marshall Islands ( Guru ) the registered owner of the vessel MV GURASIS; c. Indore Corporation Limited of Marshall Islands ( Indore ) the registered owner of the vessel the MV Pride of Indore; d. PT Bhatia International of Indonesia - an company trading in coal in Indonesia (99% equity stake) . 8. Further, according to the Applicant, IDBI Bank has alleged debt of approximately ₹ 82.04 Crores against the Corporate Debtor and its fraudulent conduit BGTL. There are no substantial assets for the Corporate Debtor and BGTL to satisfy the debt claim of IDBI but still certain officers of Indore Branch of IDBI Bank have turned a blind eye to the fact with other entities. Bhatia Group has significant assets and lucrative business and the IDBI Bank ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tia Group . The promoters, key management personnel, shareholders are Mr. SS Bhatia and Mr. GS Bhatia and their immediate family members who have provided personal guarantees to the IDBI Bank in addition to mortgaging their personal immovable properties to the IDBI Bank. 10. The Authorised Officer of IDBI Bank, who is the Financial Creditor of Asian Natural Resources (India) Limited that triggered the Corporate Insolvency Resolution Process under Section 7 of the Code, filed objections which, inter alia, read as follows; (a) IDBI Bank denied the allegations of collusion between the Bank and Asian Natural Resources (India) Limited. IDBI Bank stated that it has never indulged in selectively cherry-picking BGTL and ANRL as suggested by the Applicant herein. IDBI Bank further stated that it has filed insolvency applications against principal borrowers as well as all Corporate/Personal guarantors or is in the process of filing insolvency applications before appropriate authority. The IDBI Bank denied the allegation that the total dues are ₹ 82 Crores. IDBI Bank stated that the dues of ₹ 84 Crores approximately and ₹ 38 Crores approximately are against the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of- (a). . . . . . . . (b). . . . . . . . (c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code. 14.2 The averments made in the Application mainly relate to the screening of certain properties by the Corporate Debtor; diversion of funds that are due to the Corporate Debtor; and the alleged collusion between the Corporate Debtor and the Financial Creditor/IDBI Bank s Officers. 14.3 Once the Corporate Insolvency Resolution Process starts, the management and conduct of affairs of the Corporate Debtor comes into the hands of Insolvency Resolution Professional or Resolution Professional. In this Application, notice is given to the Insolvency Resolution Professional. He appeared once before this Adjudicating Authority. But the Insolvency Resolution Professional did not file any objections to this Application, except his Reports dated 13th June, 2017 and 5th September, 2017. However, in his Report dated 5th September, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Section 47 that a Creditor should be a Financial Creditor or a Secured Financial Creditor. Section 47 gives authority to a Creditor, Member or Partner of a Corporate Debtor to make an Application to the Adjudicating Authority to declare a particular transaction as void, in case Resolution Professional did not take any action. The very fact that the Resolution Professional was given the task of dealing with undervalued transactions and in case if the Resolution Professional fails to do the same, certain other persons as named above were given authority to move before this Adjudicating Authority, clearly goes to show that Section 47 of the Code applies even during pendency of Corporate Insolvency Resolution Process. Section 49 enables the Adjudicating Authority to pass orders to set aside the undervalued transactions as referred to in sub-section (2) of Section 45, and therefore keeping the allegations in the Application and keeping the Report dated 5.9.2017 of Insolvency Resolution Professional in the matter, this Adjudicating Authority is of the considered view that this Application, before this Adjudicating Authority, is maintainable. 15. Now, coming to the first relief ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterim Insolvency Resolution Professional/Resolution Professional shall take all reasonable steps to recover all the amounts due to the Corporate Debtor. 15(6) As regards the relief (i), in view of the moratorium order passed by this Adjudicating Authority, the said relief cannot be granted, during moratorium period. 15(7) Coming to the relief (j), this is not the appropriate stage of taking evidence of the guarantors of the Corporate Debtor on oath. Therefore, the said relief is not warranted at this stage. 15(8) Coming to the relief (k), it is in the form of gathering of evidence with the aid of this Adjudicating Authority and therefore such course is not open to the Applicant in this kind of Application. However, the Insolvency Resolution Professional or the Resolution Professional shall secure all the books of evidence of the Corporate Debtor; shall keep them in his custody and shall produce the same whenever directed by this Adjudicating Authority. 15(9) Coming to the reliefs 4(b), (e) Applicant is entitled to raise those issues while considering resolution plan if any or in the liquidation proceeding. 16. However, considering the transactions pointed out by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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